What the UK vote to leave the EU means for Ireland

After the UK decided to leave the European Union last night, here is what that vote may mean for Ireland.

The Economy – It could cost us €3bn

Michael Noonan released a Summer Economic Statement earlier this week which estimated that a Brexit could cost us as much as €3bn over two years.

This would potentially wipe any room for tax cuts and extra spending in the coming years.

Mr Noonan attempted to play down fears, suggesting it wouldn't affect the amount of spare cash that the Government will have to spend.

"That's containable within the figures. There are a lot of moveable parts within the figures,” he said.

Other have said a Brexit offers an opportunity for Ireland to attract new multi-national business as the only English speaking country in the European Union. Sterling has already plummeted today and we are now in uncharted water.

Northern Ireland – Borders or a United Ireland

This result will lead to a ramping up of calls for a referendum on a united Ireland but the immediate question will be over the Border.

Taoiseach Enda Kenny warned throughout the campaign that we could see a return of border controls but Northern Secretary Theresa Villiers, who campaigned for a 'Leave' vote, denied this.

Nobody wants a return to a physical border but the terms of a UK exit and the negotiations with the rest of the EU may determine whether we're in for tailbacks on the M1.

Revenue is looking into what customs controls will be necessary if Brexit happens, with electronic checks being considered as one possibility.

There are also fears that a Leave vote could undermine the fragile peace process that has been supported by €1.5bn in EU grants since the first ceasefires in 1994.

The North is set to get €3.5bn in various EU regional, peace and farm grants for the years 2014-2020. A total 87pc of its farm incomes come from EU grants.

The vote may also affect the all-island bid to host the Rugby World Cup in 2023.

Justice – Dissidents still a threat

An Garda Siochana and the PSNI work closely on a range of issue so that co-operation must be maintained.

Tánaiste and Justice Minister Frances Fitzgerald was briefed last month on how relations between the two forces are "close and productive".

They work together on everything from cracking down on dissident terror groups to anti-smuggling operations. A revised cross-border policing strategy that covers investigations, intelligence-sharing and emergency planning has been agreed recently and is due to be launched soon.

Ms Fitzgerald was also told the future of the Common Travel Area (CTA) is in question in light of the UK referendum.

She was told that CTA co-operation was "high priority" and had gained "added impetus" amid "the security threat from the foreign fighters (returning from the Syria war) and the ongoing Brexit debate".

Foreign Affairs – A diplomatic nightmare

Our whole relationship with Britain and the EU is about to change. Apart from anything we tend to side with the UK on a lot of issues at the EU Council and have ridden on their coattails when it comes it reform.

Foreign Affairs ministers across Europe face a massive challenge this morning, but none more so than Charlie Flanagan.

People who blithely say Ireland and Britain had a special relationships before the EU ever existed miss a key point. Whatever post-Brexit arrangements are put in place must be agreed with the other 27 EU states.

Already, a potential crack has appeared, with Ireland backing Britain keeping full access to the single market and Germany warning that Britain cannot "cherrypick."

Irish in Britain – Special status at risk

Ireland has had a common travel area with Britain since the foundation of the State. In practice, Irish citizens are treated the same as the British for issues like social welfare, work and pensions.

Leave campaigners in Britain have insisted that the special status of the estimated 600,000 Irish-born immigrants in the UK will not change.

But former president Mary McAleese has argued that this cannot be taken for granted following a Leave campaign in which immigration loomed large. She also raised doubts that Britain could be able to continue "special Irish status" under international law.

Business - risks and opportunities

There are risks and opportunities for business. In terms of the wider economy, the ESRI has warned that Irish GDP could drop by 0.3pc for every percentage point that the UK's GDP falls in the event of a Brexit.

The predictions of market volatility and contraction in the UK economy all spell bad news for Irish companies.

Business lobby groups have warned that small and medium enterprises would be more severely impacted than larger companies. There is currently €1.2bn worth of trade between Ireland and the UK every week.

The ESRI has estimated that this could fall by as much as 20pc in the medium term if Britain leaves the EU.
In terms of Irish exports, a lot will depend on the deals the UK does with the EU after a Brexit. A fall in the value of sterling would harm Irish exports.

Agri-food is viewed as being particularly vulnerable to a disruption to exports. Large multinationals may be better able to weather the storm, with pharmaceutical firms and medical device manufacturers better able to fall back on other international markets.

There is a possibility that Britain leaving the EU could lead to some foreign direct investment there being diverted elsewhere in the EU, which would be an opportunity for Ireland.

However, we would also be competing with 26 other remaining members states for this.

Travel – Get our your passport

Producing passports could become a feature of travel between Ireland and Britain.

Be prepared to show your travel documents at ferry ports and in a worst-case scenario at the Border with the North - though both governments would like to avoid that eventuality.

Visitors from Britain made up 40pc of the total number of foreign nationals coming to the country in 2015.

That's more than three million individual trips. A fall in the value of sterling could seriously dent the numbers travelling here.

Agriculture and Food – The real money question

Irish agribusiness will be the most exposed, with €5.1bn in farm produce going to Britain in 2015. Britain buys €1.1bn of Irish beef, €1bn of dairy produce and 60pc of our pigmeat, worth €3.3m, per year. A recent Teagasc study suggested that all this could drop by up to 8pc or some €800m per year.

Loss of UK net EU contributions of €8.4bn per year could hit Brussels' funding for Irish farming. New animal and plant health regulations may have to be worked out, adding to costs.

Britain and Ireland will be keen to make new trade arrangements. But these must be agreed by all of our EU partners.

EU farm payments could also be hit, Teagasc warned.

Kevin Hanrahan said that the Basic Payment scheme that channels €1.2bn into Irish farms annually are likely to be hit if the Brexit referendum is passed in Britain next week.

Despite pleas from the British Prime Minister, David Cameron, for British farmers to vote to stay amid what he called an "overwhelming case when it comes to farming", the majority of farmers appear to have voted for a Brexit.